{"id":181320,"date":"2016-07-30T19:31:00","date_gmt":"2016-07-31T00:31:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2016\/07\/30\/imf-internal-report-says-that-the-screwed-the-pooch-in-greece\/"},"modified":"2016-07-30T19:31:00","modified_gmt":"2016-07-31T00:31:00","slug":"imf-internal-report-says-that-the-screwed-the-pooch-in-greece","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2016\/07\/30\/imf-internal-report-says-that-the-screwed-the-pooch-in-greece\/","title":{"rendered":"IMF Internal Report Says That the Screwed the Pooch in Greece"},"content":{"rendered":"

An internal report reveals that IMF staff gave engaged in favoritism toward the EU and the Euro in the handling of the ongoing Greek financial crisis<\/a>:<\/p>\n

The International Monetary Fund\u2019s top staff misled their own board, made a series of calamitous misjudgments in Greece, became euphoric cheerleaders for the euro project, ignored warning signs of impending crisis, and collectively failed to grasp an elemental concept of currency theory.<\/span>

<\/span>This is the lacerating verdict of the IMF\u2019s top watchdog on the fund\u2019s tangled political role in the eurozone debt crisis, the most damaging episode in the history of the Bretton Woods institutions.<\/span>

<\/span>I<\/span>t describes a \u201cculture of complacency\u201d, prone to \u201csuperficial and mechanistic\u201d analysis, and traces a shocking breakdown in the governance of the IMF, leaving it unclear who is ultimately in charge of this extremely powerful organisation.<\/span>

<\/span>The report by the IMF\u2019s Independent Evaluation Office (IEO)<\/a> goes above the head of the managing director, Christine Lagarde. It answers solely to the board of executive directors, and those from Asia and Latin America are clearly incensed at the way European Union insiders used the fund to rescue their own rich currency union and banking system.<\/span>

<\/span>\u2026\u2026\u2026<\/span>

<\/span>In an astonishing admission, the report said its own investigators were unable to obtain key records or penetrate the activities of secretive “ad-hoc task forces”. Mrs Lagarde herself is not accused of obstruction.<\/span>

<\/span>\u201cMany documents were prepared outside the regular established channels; written documentation on some sensitive matters could not be located. The IEO in some instances has not been able to determine who made certain decisions or what information was available, nor has it been able to assess the relative roles of management and staff,” it said.<\/span>

<\/span>The report said the whole approach to the eurozone was characterised by \u201cgroupthink\u201d and intellectual capture. They had no fall-back plans on how to tackle a systemic crisis in the eurozone \u2013 or how to deal with the politics of a multinational currency union \u2013 because they had ruled out any possibility that it could happen.<\/span>

<\/span>\u2026\u2026\u2026<\/span>

<\/span>This pro-EMU bias continued to corrupt their thinking for years. \u201cThe IMF remained upbeat about the soundness of the European banking system and the quality of banking supervision in euro-area countries until after the start of the global financial crisis in mid-2007. This lapse was largely due to the IMF\u2019s readiness to take the reassurances of national and euro area authorities at face value,\u201d it said.<\/span>

<\/span>\u2026\u2026\u2026<\/span>

<\/span>In Greece, the IMF violated its own cardinal rule by signing off on a bailout in 2010 even though it could offer no assurance that the package would bring the country\u2019s debts under control or clear the way for recovery, and many suspected from the start that it was doomed.<\/span>

<\/span>The organisation got around this by slipping through a radical change in IMF rescue policy, allowing an exemption (since abolished) if there was a risk of systemic contagion. \u201cThe board was not consulted or informed,\u201d it said. The directors discovered the bombshell \u201ctucked into the text\u201d of the Greek package, but by then it was a fait accompli.<\/span>

<\/span>\u2026\u2026\u2026<\/span>

<\/span>The injustice is that the cost of the bailouts was switched to ordinary Greek citizens \u2013 the least able to support the burden \u2013 and it was never acknowledged that the true motive of EU-IMF Troika policy was to protect monetary union. Indeed, the Greeks were repeatedly blamed for failures that stemmed from the policy itself. This unfairness \u2013 the root of so much bitterness in Greece \u2013 is finally recognised in the report.<\/span>

<\/span>\u201cIf preventing international contagion was an essential concern, the cost of its prevention should have been borne \u2013 at least in part \u2013 by the international community as the prime beneficiary,\u201d it said.<\/span><\/p><\/blockquote>\n

So, even with institutions in the tank for the Euro, the currency continues to fail.<\/p>\n

I still say that the solution is to get the Germans out of the Euro, sooner, rather than later.<\/p>\n","protected":false},"excerpt":{"rendered":"

An internal report reveals that IMF staff gave engaged in favoritism toward the EU and the Euro in the handling of the ongoing Greek financial crisis: The International Monetary Fund\u2019s top staff misled their own board, made a series of calamitous misjudgments in Greece, became euphoric cheerleaders for the euro project, ignored warning signs of …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1010,970,1080,984,1039,1017],"tags":[],"class_list":["post-181320","post","type-post","status-publish","format-standard","hentry","category-bureaucracy","category-corruption","category-currency","category-europe","category-incompetence","category-international-finance"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/181320"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=181320"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/181320\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=181320"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=181320"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=181320"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}